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Swedish pension lending reaches 1.9% of GDP

SWEDEN - Net lending in the Swedish pension system - the Premium Pension Authority and the national buffer funds - has been put at SEK50bn (€5.4bn), or 1.9% of gross domestic product, by the government.

"In 2005, the net lending in the pension system, i.e. the National Pension Funds and PPM, amounted to SEK50bn, or 1.9% of GDP," the Ministry of Finance said in the 2007 budget bill.

It disclosed that investment assets in the pension system rose by SEK140bn "as a result of the rising value of shares, which account for the bulk of assets in both the National Pension Funds and the funds managed by PPM".

It was also revealed that Sweden is facing a SEK19bn deficit related to a double transfer of funds to PPM from the National Debt Office.

"The projected deficit is due to the fact that the central government sector will be hit this year by a double transfer of premium pension assets  from their temporary management at the National Debt Office to the funds managed by the  Premium Pension Authority," the ministry said.

Net savings in supplementary pension schemes were put at just over SEK55bn, giving a savings ratio of 7.3%.

Total assets in the pension system amounted to just over SEK1trn.

The increasing number of older people in the population would see pension expenditure as a percentage of GDP rising to 9.5% in 2020 from 8.5% currently.

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